Setting Up Business (Childcare, Enrichment)

[Augmum]

Sniper Angel:

Hi All,


Any idea to set up childcare centre, enrichment centre (Berries, LCentral) where get their francise?
Is it going to cost a lot to set up & estimate when would get the investment return?
Anyone can share thier business opportunities or if you know of any method?

hi
If u’re thinking of setting up of a chilcare centre, i would advise u, not to.

i had gone thru this tedious process myself when I assisted my sister-in-law to setup one.
after several yrs of operations, she sold the entire childcare business to somebody including the premisies. (she bought a huge semi-d just for it).

There are lots of legislative and adminstartive requirements, and also lots of rules to comply with before u are granted the license from MCD and other relevant authorities.

The initial setup cost is very high and good teachers and principals are difficult to hire.

Sometime ago in this forum, there was a consultant who talked abt the prob of hiring teachers/principal.
u can refer to this link if u're interested.
http://www.kiasuparents.com/kiasu/forum/viewtopic.php?p=326609&highlight=#326609

[verykiasu2010]

Trapwithin:

Then maybe you want to consider Ah Koon Coffee, operational wise .. seems to be less complex.

my friends are doing Ah Koon....so don't compete lah ....

[adbie]

Augmum:

If u’re thinking of setting up of a chilcare centre, i would advise u, not to...

Hi, how about tuition centres? Is it possible to operate a one-man show initially, gradually build up a small reputation in the local area, and then expand with more teachers?

As it's quite inconvenient to operate from home, I'm thinking of getting a shop. With a shop front, I suppose there's a better chance of getting more students. The downside, of course, is rental costs.

Any opinions / advice much appreciated.

[ppnqq]

Hi Adbie, do you have any room to spare? Most tutors start off with a room within their own unit/flat before expanding or even becoming popular. IMHO, it would not be advisable to rent a shop space with only you giving tuition because most shop space doesn’t come cheap, especially those ideal location. How many tutees do you have to take in a month in order to cover all cost, how many classes a day are you able to handle and how many in aa class? You have to understand not just only the cost but also that of the parents and tutees feelings and thoughts. Most parents would definitely prefer a class to be the smaller the better for better attention and the tutees also would not want to become ‘sardines’ as well.


Adbie, there are lots of factors to consider. You have to work out all the sums and how you intend to plan your schedule and things like even location etc. It’s never easy to set up a business, big or small. But of course, if you have the means and ability, and are determined enough and also able to have everything laid out and planned properly, you are on the way to success.

JMHO.

Good luck and all the best to you.

[HappyFaye]

I 'happened' to be managing a tution centre would be glad to share my experience here, if you don't mind the long message.


Due to cultural shock from an established MNC to a locally owned company, I quit my new full time job when my boy was 5 months old.
Nothing to do at home, beside taking care of my boy, I felt bored so I took up a course in study technique programme originated from south Africa. The course came with some exclusive rights to teach the programme. With this enrichment programme, I approached tuition centres to sell my programmes and one of the education chains opened the door for me! They even offered me to franchise their centre.

I got a friend to join me and we started the tuition centre 2 weeks before SARS closure in 2003. It was real tough, but we managed to pull through.

The results – I have a manager managing the centre now with 7 fulltime teachers & 2 fulltime staff and I manage from home. I have very low turnover of teachers and hence my business is stable.

The lessons I learnt from managing my tuition centre –
•\tEducation business is good for mothers – because of our vested interest in educating our children and its flexi hours. I always believe that mother makes the best teacher, if we want to!
•\tInitial phase into the business is always tough and you need to be prepared to spend long hours. However, once you set your footing right by having good services, it is highly possible to make it your stable stream of income. Tuition business is a people business. Do it with sincerity.
•\tIt is good to have a working partner to start the business so you have someone to share the risk and most importantly, to discuss ideas when facing challenges
•\tYes – good staff and teachers are hard to come by. You need to expand your network by attending seminars/workshops.
•\tRental is the killer now with the hot property market. However, it is still manageable as compared to childcare centre with rental ranging from $6k - $20k. For tuition centre/enrichment centre, depending on location, $1k - $5k is still manageable if you have enough resources, meaning, enough programmes to offer.

To set up a tuition centre or enrichment centre, let’s say rental is $4K with 3 classrooms of 300sf, you may need to set aside start-up capital of $50K maximum and 6-month working capital of $30K, assuming no employment of staff during the first 3 months. You may need 50 to breakeven, assuming $100 per student but if you have 3 classrooms, your maximum capacity can be 600 students. It is even more viable if you can teach for a start but this is not advisable in the long term because you end up spending less time with your family.

If you do it right, it is quite a safe business to do because 90% of our primary school students are having tuition (~ 200K primary students).

Hope I didn’t bore you to death with the long message. Good Luck!

[adbie]

Hi ppnqq and HappyFaye - thanks for your very informative replies.


HappyFaye - Is 300sf the floor area for each classroom or for all 3 classrooms? The MOE guideline for private schools recommends 1.5sqm (=16.15sf) per student. So for small group tuition, I suppose 100sf is sufficient for a classroom?

Also, would you mind sharing how you did the initial marketing of your services? Was it very challenging? Were parents unwilling to try out a new centre?

I have some more questions related to registration with MOE and many more other questions - is it ok if I pm you directly?

Really appreciate your kind help.

[HappyFaye]

adbie:

HappyFaye - Is 300sf the floor area for each classroom or for all 3 classrooms? The MOE guideline for private schools recommends 1.5sqm (=16.15sf) per student. So for small group tuition, I suppose 100sf is sufficient for a classroom?


Also, would you mind sharing how you did the initial marketing of your services? Was it very challenging? Were parents unwilling to try out a new centre?

I have some more questions related to registration with MOE and many more other questions - is it ok if I pm you directly?

Yes MOE does have a guideline. The 300sf capacity can be 15-18 students. If the room is too small, it may limit your potential growth, unless you strongly believe in small class size. Some experienced teachers are really good and 20 per class is good for the class dynamic especially language lessons. It is just more fun to have more students joining the activities. Don’t forget that the new-age teaching requires activity space hence the proposed 300psf.

You can try as many marketing strategies as possible but again it involves cost. The initial marketing avenues include mailers by Singpost to your surrounding residential area near your centre to create awareness of your presence (Cost ~ $3k for 30K flyers but I can’t really remember the cost as I don’t do mailer anymore). If you can do door-to-door mailer is ideal but of course it is more expensive. The community magazines within your premise like Spring Magazine or Contact magazine may be another choice. Popular magazine is a good choice too. In your flyer, you should give promotional discount like try 4 lessons at promo rate or allow students to sit in for 1 lesson free. The most effective measure for me was the referral fee which you reward students/parents who refer friends.

Was it challenging? Yes! You need to pitch your sale speech well and you must have confidence in your teachers. As mentioned, this is a people business and hence sincerity and honesty are very important as it is widely spread by word of mouth.

But once your centre is established, there is not much marketing effort needed. I spent quite a lot on marketing at the initial stage but not anymore now. What you need is the financial holding power and good teachers!

With regards to MOE registration, I don’t know of anyone getting the approval first before running the business and I don’t think MOE will grant an in-principal approval. The tricky part of is to ensure your get the fire-safety cert for your premise so you need to get a certified engineer to do it for you. Try to get a contractor that is familiar in renovation for school and the contractor should be able to advise you. MOE registration is not difficult actually so long as you have the fire-safety cert. The safest way is to look for a place that has some schools/education centres.

Disclaimer here - The information is true based my own experience only.

[adbie]

HappyFaye - thanks so much for the detailed info. Is it true that MOE registration is optional? I was told that some big names in the tuition centre industry aren’t registered.

[HappyFaye]

Well, to the authority, this is definitely not an option. MOE may be not as strict now but I believe the day will come. Unless you don’t intend to do it as a long term business, I suggest you go with MOE registration. You can ‘delay’ a bit though but you really need to make sure your premise passes the fire safety requirement.

[adbie]

Thanks, HappyFaye. I guess you're the in-house expert here.


Really appreciate your generous sharing.

I downloaded the full list of registered private schools from:
http://www.moe.gov.sg/education/private-education/school-list/

Then I did a quick sample of those tuition centres listed in KSP's Marketplace - many of those that I sampled are not registered!